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Oil and gas jobs returning to Converse County

Published by Mike Moore on Thu, 11/30/2017 - 21:12

Sales tax numbers from Converse County are steadily rising to numbers of the 2015 boom.

By:

Ethan Brogan ethan@glenrockind.com

Sales tax numbers from Converse County are steadily rising to numbers of the 2015 boom. More requests from landmen on behalf of energy companies are pouring in to Converse County everyday, boding for an economic boom once again centered around energy.
“What I believe is that oil and gas activity has been up,” Converse County Clerk Lucile Taylor said. “It picked up a lot from September to October.”
Energy companies such as Anadarko Petroleum, EOG Resources, Chesapeake Energy and Tallgrass Energy are making moves toward Converse County. Several factors, such as sales tax revenue, point to more energy work coming fast. The county recorded more than $3.1 million in sales tax revenue in September of this year, which is about $1.2 million more than in September 2014.
“Our numbers in the mining sector are seeing a steady incline,” Converse County Treasurer Joel Schell said this week. In September alone, sales tax from mining has increased to $2.5 million.
“That $2.5 (million) number, with mining and the related industry, was the best number we had seen in mining since April of 2015,” Schell said.
Sales tax has steadily gone up during the first half of the 2017-2018 fiscal year. A standard trend is to see a steady increase to sales tax during the holidays, but these spikes in the energy industry show companies preparing for what comes next, officials explained.
One factor is the hits on Taylor’s iDoc Market site. iDoc allows oil and gas companies the opportunity to access hundreds of land and legal documents to begin setting up future work. Subscription fees are charged and Taylor has seen approximately a $13,000 increase to subscriptions from July to August and a $10,000 increase from September to October in Converse County.
“I’ve seen it pick up, lots of oil companies, lots of new leases being transferred,” Taylor said. “It just gives you the sense (that) everybody is getting organized and ready.”
Another predictor of an incoming boom, the value and volume of energy resources are increasing, according to Converse County Assessor Dixie Huxtable.
The estimated taxable value of coal in 2016 was approximately $65 million, for 2017 the value jumped to $145 million.
Oil followed suit, although it is difficult to track since the price of oil can drastically shift. In the first six months of 2016 the price per barrel of oil was about $30 on average. In 2017 at the same time period, the price of oil jumped to about $42 per barrel.
The first six months of 2016 showed gas at about a $17 million worth of taxable value in Converse County. In 2017, the value more than doubled to $43 million, although the numbers are difficult to track due to the burn-off and reused fuel.
Nonetheless, these combined factors show the beginnings of an energy upswing with the price of oil sitting at about $57 per barrel.
“They tell me it’s going to pick up, we’re going to be the new Sublette County,” Huxtable said. “Somebody in the industry once told me that $50 (per barrel) was a benchmark. As long as it stays steady at $50, we can keep exploring.”

BOOMS AND BUSTS
Every Wyomingite is used to the cycle of economic booms and busts.
In 2015, Converse County experienced one of its largest booms ever recorded. Even the economic swells of the 1980s and 2000s pale in comparison to the behemoth of 2015.
In 1980, an economic boom centered on mining increased profits through the roof, making the energy industry account for 46 percent of all profits in Converse County.
In 2008, profits again soared with personal income increasing, congruent with booms in the past. A lead up of increased revenue showed signs of an impending boom, but in November a sudden drop of workers raised unemployment in Converse County, even as oil companies, such as Exxon Mobile, reported record breaking profits.
The following years gave way to more energy jobs until the climax: the biggest energy boom Converse County has ever seen.
In the 2014-15 fiscal year, Converse County’s sales tax skyrocketed to more than $88 million, decimating previous records of sales tax revenues in any previous fiscal year.
Most of the county revenues came from two pipeline installations, while the rest of the state banked on coal and oil.
“Coal was bouncing along. We (Wyoming) had a little better than $1 billion in coal and gas,” Wyoming State Treasurer Mark Gordon said. “We were rolling in dough, the price of oil at that time was right around $100 (per barrel). But by 2016 that following year, in the winter, the price of oil dropped to about $26.”
The following fiscal year, sales tax revenue in Converse County tanked more than $50 million from the $88 million high.
“You had the double whammy of stock market declines and oil and gas, plus you had the Obama clean power plan,” Gordon said. “(That was) the most precipitous loss of income in our history.”
Everything from the 2015 boom lined up economically. An abundant workforce was available, the price of oil was up and companies already had footholds in Wyoming. But with a large boom comes one big bust.
“I don’t see that (boom) coming back exactly the same way,”Gordon said. “2015 was a phenomenal year all the way through . . . (in) 2016 you end up with the largest drop in revenue we’ve ever seen.”
Of the energy companies contacted by the Budget, only EOG responded.
“I imagine our Powder River Basin assets will be called out specifically,” EOG Media Relations contact Kim Ehmer said of their 2018 plans. EOG’s plan won’t be out until February.
With sales tax numbers increasing steadily over the months and activity from energy companies and landmen, a boom is on the horizon, but it is all dependent on the price of oil during the next few months, the county officials cautioned.